[Click eStock] "Samyang Foods Set for Another Earnings Growth Ahead of Plant Expansion"

Operation of Second Miryang Plant in the Second Half to Alleviate Supply Shortages
Strong Demand in the U.S. and China... Anticipation for Growth in Europe

Samyang Foods is expected to increase its production capacity in the second half of this year with the operation of its second Miryang plant. As excess demand continues, analysts predict that the alleviation of supply shortages will further strengthen the company's overseas growth momentum.

On April 22, Daishin Securities maintained its 'Buy' rating on Samyang Foods and raised its target price by 30% to 1.2 million won. The previous day's closing price was 957,000 won.

Samyang Foods plans to expand its production capacity from 1.8 billion units to 2.5 billion units by operating the second Miryang plant in July this year. Assuming an initial utilization rate of 50%, it is expected to secure more than 100 billion won in production value.

Given that excess demand persists, export growth is expected to be sustained through regional and channel expansion. With additional production capacity, the company is also in a position to diversify its product lineup by launching new products tailored to local tastes.

For the first quarter, consolidated sales are expected to reach 486.3 billion won, with operating profit at 102.4 billion won. These figures represent increases of 26.1% and 27.8%, respectively, compared to the same period last year. The operating margin is projected to be 21.0%, in line with market expectations. The company improved its regional mix by focusing on high unit price markets such as the United States and China, which together account for 80% of total sales. Favorable exchange rates, cost stabilization, and overall SG&A management are expected to drive record quarterly operating profit.

By region, in the United States, the store penetration rates at Costco and Walmart remain at the high 90% range and 50%, respectively, unchanged from the previous quarter. Robust demand is expected to drive a 65% year-on-year increase in sales. However, since production facilities are located in Korea, there is exposure to U.S. tariff policy risks. Nevertheless, it is expected that the U.S. subsidiary will adjust supply prices to minimize the impact of tariffs. Taking into account the favorable exchange rate and the possibility of price increases, the impact of tariffs is expected to be limited. In fact, the plant expansion is anticipated to drive sales growth in the second half of the year.

In China, despite the base effect from last year's Lunar New Year, steady expansion of offline channels such as snack shops is expected to result in a 35% year-on-year increase in sales. Exports to both Europe and Southeast Asia are also considered robust. Han-Sol Jung, a researcher at Daishin Securities, commented, "Europe, in particular, is at the initial stage of store entry in countries such as the Netherlands and Germany. There is ample growth potential, with new market entries expected this year in France, the United Kingdom, and other regions."